Changing In The Role Of Management Accountant Accounting Essay


This article gives a brief overview of the evolving roles of the management accountant as well as the practices of management accounting. A brief overview of the process of implementing these changes and the motives driving the changes. What were the motivations behind implementing the changes and what were the primary reasons and to what degree these changes are currently being put into applied in the real world?


In the last few decades, many authors have pointed to research by Johnson as well as Kaplan (1987) to be an example of an organization in this regard. that has seen an evolution in the expectations of the management accountants. This article provides a brief outline of the reason what, how, and how it has occurred a shift in the function of the management accountants over the past three years. The the business world has drastically changed and this is mostly because of changes in technology and the ever-growing requirements of business leaders across the world. These changes have led to an enormous amount of transformation in the financial aspects of business and management accounting isn’t an exception. With these changes, the management accounting process in general is affected. It has led to changes in the accounting techniques and systems and has been the subject of diverse debates regarding modifications to the purpose of accounting. However, there were two kinds of developments: the adoption of new techniques and tools that improve accounting practices, and , on the other hand, a changes in the position of the management accountant, which is taking a more active role in decision-making and providing advice instead of solely focused on giving information.

In the next sections of this essay will provide an overview of the primary reason for the change and how they affected accounting practices for management and in what way these changes are being adapted by the accounting industry.

Motives behind the changes

The constant change in environmental and technological elements have impacted the global economy over the past several decades. Accounting and finance are a major element in the running of any economic system. It is a crucial aspect in any economy, accounting practices have suffered greatly. However, the focus of this paper is on the practice of management accounting and the reasons for, and how in what way has there changed in the way they practice.

In the cloud of auditing, financial reporting as well as taxation on a a number of occasions, management accounting has been able to escape the scrutiny of criticism. Management accounting is often viewed as a function of the management accountants are relegated to the bottom of accounting and restricted to accounting for the organization’s books and budgets and often only in the context of compulsory professional or university courses. If we examine this issue from a the perspective of history, management accounting was to a degree still seen as a dull field.

We can conclude that this is because of the globalization of markets, which has intensified competition, and today marketplaces are becoming more unstable and the time to react is extremely short for companies to take action. Innovations in production and information technologieshas helped reduce the time required for processing information by accounting specialists and allowed other employees to assume tasks for themselves, tasks previously reserved as being for accountants. [i]

Additionally, systems such as SAP is becoming increasingly prevalent in multinational corporations and small-sized businesses. A recent study regarding this subject has shown that there is an evolution in the requirements of managers’ information. This could be due to the evolution of the organization structure. Recent years have seen intense competition between organizations for having the best and where changes are needed due to various market circumstances, and, of course, different business strategies utilized in various companies. These factors are the main reason behind the shift in the work of management accountants.

Implementing the changes and their effects

If we review the latest studies on the changing role of the management accountants, we’ll discover that there are two kinds of elements which have caused a change in the working environment of management accounting. External factors have forced organizations to modify their internal structures to be competitive with ever-changing technological advancements. Management accountants of the 21st century have evolved into an engine with multiple functions that is more deeply involved with accounting issues than they were before.

Now , managers require more information than they did before, to make decisions and other pertinent issues of organization that are essential for a profitable outcomes. Internal organizational aspects like decision-making need advanced information and efficient techniques are required to complete the tasks. This is why the most of the information that managers and accountants are now electronically accessible to all levels of the company, as well as managers are able to immediately spot the variances in their performance and keep track of their performance every day. This technology has replaced the old method which allowed managers to track their progress at the end of each month. In a discussion between CIMA members, it was said: “now systems are such that managers can create information without having to consult the financial analysts. They both have access to the same data. However, they make use of the information with different methods. This is a significant modification”.

There are a variety of terms used to describe the latest job of the management accountant or is expected to be and include “modern business-oriented accountant” (Granlund and Lukka 1998b), “business partner” (Siegal and Sorenson 1999), “internal business consultants (Burns and Vaivio, 2001)”, “strategic management consultant” (Holtzman 2004) as well as “Hybrid accountant” (Burns and Baldvinsdottir 2005). The theme, however, was either way or the identical with regard to the new job. [ii]

However, the reality is that the function of accountants is now more significant than ever previously, and not only at the corporate environment but also at the international and national levels. The primary goal of the manager accountants has always been to increase their company’s efficiency and profitability, however nowadays, because of shifts in various economic and environmental aspects, their methods have changed in recent times for the better.

A noticeable change in the past is that prior to there was a lot of the management accounting work is driven by requirement for compliance and control. Now, the focus on control and compliance is decreasing, while other factors such as support for competitiveness have increased because of increased competition, increased focus on the customer as well as the importance of quality, and, of course, the globalization.

The increasing importance of supporting competitive markets requires that management accountants be able to communicate and analyze abilities. Additionally, they are now supporting as well as process managers, and are involved directly in the process of making decisions. They also participate in the planning of short- and long-term plans They also need to create systems that help and provide the essential information required. As a result of these changes, accounting professionals must be directly become involved in formulating and execution of business plans.

In what way has there been any change

As in comparison to the past decade’s managerial accounting practices have been radically altered, managers accountants have to take a wider perspective of business. Management accountants today are more efficient and effective. Management accounting is changing and the reason are the reasons. These are the factors mentioned above: changes to the social and economic structures, globalization, shifts in markets as well as technological advances and lastly, but certainly not least, the necessity for companies to be more customer-centric.

The focus has changed from stewardship in the past to a more sophisticated roles for feeding forward planning, strategic management and planning (pierce 2001). With the latest abilities, technology and greater analytical capabilities and leadership abilities, the new generation of management accountants are emerging as a result of the shift.

Manager accountants nowadays spend their time in’strategic management accounting’ with the goal of expanding the scope of the traditional accounting for management. The term “strategic accounting for management was first used in the work of Ken Simmonds in 1981. The CIMA defines this term ‘as an accounting method that is focused on the information that is related to factors outside of the business and also financial information and internal produced information’.

The integration of these systems is becoming more crucial because it allows managers to monitor the day-today progress of their business processes. How the processes are managed and what is their results, and the method is considered to be an essential function for the modern, more advanced management accountant. In addition, with the evolving function of the management accountant in certain organizations, their roles are changing , as we mentioned earlier. Examples include business analyst, business advisor and a few more.

In addition, some surveys have indicated that there could be more changes to the management accounting role Management accountants will take on the responsibility of managing matters such as designing, developing and running a financial and management information systems.

The pattern is that the management accountants are working with business units rather than being an individual unit like before. This is due to the shifting of the responsibilities of the manager accountant as well as modifications to the organizational structure. Management accountants now work with engineers, managers, and engineers. [iii]

In certain instances, it is noticed that management accountants have a greater involvement in the development of corporate strategy. They tend to be more active and not operating as a unit. This is the reason for managers accountants to be more skilled, and advance are now a required qualification.

To summarize the state of the job changing, we could also claim that in taking it to the next level , the elements played a crucial part, such as technological advancement as well as globalization, restructuring taking overs/mergers, innovative accounting methods and more. Manager accountants have been adapting this changes that are not just aiding organizations in becoming more efficient in generating profits however, it is as well improving the image of the accountant in the management department.


At the end of the day, we could claim that the evolving roles of the management accountant are beneficial to the profession. In order to be competitive in this ever-growing economy and all the changes occurring all around us, accounting and finance is a key element in any economy that is successful.

The responsibilities of the management accountant has moved to a new dimension. With the advancement of technology and advancements in technology have created new software’s that have made the job easier and quicker for the manager accountant that is a constant requirement in this fast-paced market where the markets are highly competitive and error margin is high.

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